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Herein presented are the Code of Ethics, Trade Practice Rules and Procedures for their Enforcement adopted by the National Association of Development Companies (NADCO). In recognition of the responsibility conferred by the U.S. Small Business Administration (SBA) to each Certified Development Company (CDC), the members of NADCO individually and collectively, agree to this statement for the mutual benefit of the SBA, all CDCs and their clients.

PART A

Code of Ethics

The business of each CDC shall be conducted at all times in full compliance with the Small Business Investment Act of 1958, any amendments thereto, and the Regulations issued thereunder by the Small Business Administration, and in accordance with high standards of commercial honor and just and equitable principles of conduct.

The constant goal of each CDC shall be to improve the welfare of the local community and the small business concerns, which it serves.

Each CDC shall promote and maintain ethical standards of conduct and deal fairly and honestly with all small business concerns seeking its assistance, with all companies to or with whom it makes loans or investments, with all other CDCs, with the Small Business Administration and other Government agencies having jurisdiction.

Each CDC and its officers, employees, designees, and representatives shall abide by the Code, the Trade Practice Rules, the Procedures for their Enforcement, and all rulings and orders issued pursuant to them; and all such officers, employees, designees, and representatives are as individuals hereby so bound.

In the administration of the Code and the Trade Practice Rules, it shall be the purpose and object of this Association not to discriminate against any member or CDC, not to engage in any practices which may be considered as being in restraint of trade.

Unethical conduct shall be deemed to include any evasive device intended to cloak noncompliance with the Act, Regulations, Code, Trade Practice Rules, or Procedures for their Enforcement.

PART B

Trade Practice Rules<

Trade Practice Rules

It shall be the duty and obligation of each CDC to strive at all times to uphold the integrity, honor and reputation of the industry.

No CDC shall malign, defame, or unfairly criticize any other CDC in any dealings with proposed client companies or otherwise.

If one CDC asks another CDC whether it has negotiated or is negotiating with a proposed client company, the second CDC shall disclose whether it has or is and whether the matter is still open. Any further disclosures on the part of the second CDC shall be within its own discretion, and the decision of the first CDC to proceed with its own negotiation shall likewise be at its own discretion, it being intended to foster free competition.

No CDC may be used or permit itself to be used to promote the welfare of or assist its officers, directors, stockholders, employees, designees, or representatives except insofar as they may benefit from the success of the CDC. This rule shall not be deemed, however, to proscribe any investment or relationship which has been approved in writing by the Small Business Administration, nor the establishment of normal banking, business, or professional relationships; nor shall this rule be deemed to proscribe or prohibit the payment of professional fees, directors' fees, or other compensation for services, provided that a full disclosure thereof is made in advance in writing to the officers and directors of the CDC and to the officers and directors of all participating CDCs and other associates in the investment.

PART C

Procedures for Additions or Amendments

Proposed additions or amendments to the Code of Ethics, the Trade Practice Rules, and the Procedures for Their Enforcement shall first be submitted to the Administration Committee for review.

Following completion of its review the Committee shall report its conclusions and recommendations on such proposals to the Executive Committee of NADCO. Additions or amendments may be adopted by the Executive Committee or by the Board of Directors of NADCO.

ARTICLE I

MembershipSECTION 1 – Classes of Members. Membership in this Association shall be divided into two classes as follows:

A. Active Membership. Shall be open to any CertifiedDevelopment Company (CDC) certified by the Small Business Administration (SBA) under the authority of Section 503 of the Small Business Investment Act of 1958, as amended.B. Affiliate Membership. Which shall be open to others, private sector and government, who are interested in the 504 program and in receiving industry information. Affiliate members shall have no right to vote or hold office in the Association.

SECTION 2 – Applications. All applications for membership shall be submitted on forms furnished by the Association and filed with the Secretary and shall be subject to review and approval of the Executive Committee and/or its designee. By execution and submission of the application for membership, the applicant shall be deemed to have agreed to accept and comply with the Bylaws and the Code of Ethics & Trade Practice Rules of the Association as then in effect, and as they may from time to time be adopted or amended.

SECTION 3 – Termination of Membership.

A. The Board of Directors may terminate the membership of any member if such member:

1. Is in arrears in the payment of dues for a period ofthree months, or

2. Does not comply with the Association Bylaws,Code of Ethics & Trade Practice Rules, or applicable SBA statutes, regulations and operating procedures.Notice of such termination shall be given in writing addressed to the member and shall take effect at the time specified in the notice.

B. The membership of any member shall automatically terminate if and upon the date that such member becomes ineligible for membership.C. The membership of any member shall automatically terminate upon such member’s written request for termination delivered to the President or the Secretary personally, or by United States mail, first-class postage prepaid, or by commercial courier.

ARTICLE II

DuesSECTION 1 – Dues. The dues of this Association shall be paid at the following rates:

A. Active Members. Dues will be determined by the Board of Directors and become effective with the succeeding fiscal year.B. Affiliate Members. Dues will be determined by the Board of Directors and become effective with the succeeding fiscal year.C. Dues Refunds. Dues, once paid, shall not be refunded unless requested in writing by the member and approved by the Board of Directors.

SECTION 2 – Payment. Dues of active members shall be due and payable quarterly during the year. All other dues will be paid annually. All dues shall be paid directly to the Association.

ARTICLE III

A. Regional Directors. One member from each of the tenFederal Regions. Each Regional Director elected to represent a Federal Region shall be responsible for membership, congressional and SBA relations within his/her region, and for planning regional meetings.B. At-Large Directors. Eight members elected at-large. Each At-Large Director shall perform duties and responsibilities as designated by the Chair of the Board and the Board of Directors.C. President. The President of the Association.

SECTION 2 – Eligibility. Any individual serving as an employee of an Active Member-in-Good-Standing in accordance with Article VIII, Section 6 and the NADCO President shall be eligible to serve on the Board of Directors of the Association. There may be only one Board representative from any one Active Member-in-Good-Standing.

SECTION 3 – Term. Upon election to the Board of Directors, a Regional or At-Large Director shall hold office for a term of two (2) years and until his/her successor is elected and qualified, subject to Section 5 of this Article. The Directors of Federal Regions 1, 3, 5, 7, and 9 shall be elected in odd-numbered years; Federal Regions 2, 4, 6, 8, and 10 shall be elected in even-numbered years. The President will serve on the Board of Directors while in office.

SECTION 4 – Authority. The Board of Directors shall be the governing body of the Association and, except as provided by the Bylaws, shall be vested with the powers

ARTICLE IV

Executive CommitteeSECTION 1 – Executive Committee. There shall be an Executive Committee composed of the Chair of the Board, the Vice Chair of the Board, the President, the Secretary, the Treasurer, the Vice Chair for Education, the Vice Chair for Membership and External Affairs, the Vice Chair for Regulatory Affairs, and the Vice Chair for Legislative Affairs. The Executive Committee shall be a committee of the Board.

SECTION 2 – Duties. The Executive Committee shall conduct the affairs of the Association in accordance with its Articles of Incorporation and Bylaws and the policies and instructions of the Board of Directors. When the Board of Directors is not in session, the Executive Committee shall have all power vested in the Board of Directors by law, by the Articles of Incorporation, or by these Bylaws, provided that the Executive Committee shall not have the power to (a) authorize distributions, (b) approve or recommend to members action that by law must be approved by members, (c) fill vacancies on the Board of Directors or on any of its Committees, (d) amend the Articles of Incorporation, (e) adopt, amend, or repeal the Bylaws, (f) approve a plan of merger or consolidation or a plan of exchange under which the Association would be acquired, or approve the voluntary dissolution of the Association, or (g) to take any other action prohibited by law or by express resolution of the Board of Directors. The Executive Committee shall report at the next regular or special meeting of the Board of Directors all action which the Executive Committee may have taken on behalf of the Board since the last regular or special meeting of the Board of Directors.

SECTION 3 – Meetings. Meetings of the Executive Committee may be called by the Chair of the Board, the President, or any three (3) of its members. Notice of meetings shall be given to each member in writing by the Secretary at least twenty-four (24) hours in advance of the date for an electronic or telephone conference meeting and two (2) days in advance of the date for any other meeting, and shall state the place, time and purpose of the meeting. Special meetings may be held at any time without notice if all the members of the Executive Committee are present and none of them (at the beginning of the meeting or promptly upon his/her arrival) objects to holding the meeting or transacting business at the meeting, or if all the members of the Executive Committee waive notice in writing either before or after the meeting. Meetings may be conducted in person, by telephone conference calls, or by other electronic means in which all persons participating can hear one another.

SECTION 4 – Quorum. A majority of the Executive Committee shall constitute a quorum for the purpose of transacting business.

SECTION 5 – Majority Vote. If a quorum is present when a vote is taken, the affirmative vote of the majority of thevotes cast shall determine any question unless otherwise specifically provided in these Bylaws. In the event there is a tie vote, the Chair of the Board will decide the question.

SECTION 6 – Action Without a Meeting. Unless otherwise restricted by these Bylaws, any action required or permitted to be taken at a meeting of the Executive Committee may be taken without a meeting if a consent in writing setting forth the action so taken shall be signed by each member of the Executive Committee entitled to vote with respect to the subject matter thereof, either before or after such action.

SECTION 7 – Interested Executive Committee Member Recusal. A member of the Executive Committee shall recuse himself/herself from any vote of the Executive Committee on a matter in which such member is "interested” in accordance with the conflict of interest rule adopted by the Board of Directors.

ARTICLE V

Meetings of the MembershipSECTION 1 – Annual Meetings. There shall be an Annual Meeting of the Membership at such time and place as designated by the Board of Directors. At the Annual Meeting, the Membership shall elect the Board of Directors in accordance with Article III and Article VIII of the Bylaws.

SECTION 2 – Notice of Meetings. Notice of meetings shall be given to each member in writing by the Secretary at least thirty (30) days in advance of the meeting date, stating the place, time and purpose of the meeting.

SECTION 3 – Quorum. A quorum shall consist of forty (40) percent of the Active Members-in-Good-Standing, present at the meeting or by ballot.

SECTION 4 – Majority Vote. An affirmative vote of the majority of the votes cast in person or by ballot by Active Members-in-Good-Standing shall be required to determine any question; provided, however, that an attendee acting as an authorized representative of his/her CDC and present at the meeting of the Membership must vote in person for his/her CDC, and in that case the CDC’s vote on the ballot, if any, will not be counted. In the event there is a tie vote, the Chair of the Board will decide the question.

SECTION 5 – Rules of Order. Roberts Rules of Order, Revised shall govern, if not inconsistent with these Bylaws or other special rules which may be adopted by the Association.

SECTION 6 – Special Meetings. Special meetings of the Membership shall be called on the written demand of fifteen (15) percent of the membership directed to the Secretary. Other meetings may be called by the Board of Directors or the Executive Committee when deemed advisable by them. Special Meetings will be held within sixty (60) days of the Secretary's receipt of the demand, or any notice of a meeting called by the Board of Directors or Executive Committee. Notice will be given to each member in writing at least thirty (30) days in advance of the meeting date, stating the place, time and purpose of the meeting, such time and place to be designated by the Board of Directors or Executive Committee.

ARTICLE VI

Meetings of the Board of DirectorsSECTION 1 – Regular Meetings. The Board of Directors shall meet at least five (5) times during each calendar year. The first meeting shall be convened immediately following the election of the Board of Directors during the Annual Meeting of the Membership. The second meeting will be the Summer meeting and will be held between July 1 and September 30. The third meeting will be the Fall meeting and will be held between October 1 and December 31. The fourth meeting will be the Winter meeting and will be held between January 1 and March 31. The fifth meeting will be convened immediately prior to the Annual Meeting of the Membership. At least thirty (30) days’ advance notice of the regular meetings of the Board of Directors shall be given to each Director; provided, however, that no notice shall be necessary with respect to the meeting of the Board convened immediately following the election of the Board of Directors during the Annual Meeting of the Membership. The time and place of each meeting shall be designated by the Board of Directors. Meetings may be conducted in person, by telephone conference calls, or by other electronic means in which all persons participating can hear one another.

SECTION 2 – Special Meetings. Special Meetings of the Board of Directors may be called by the Chair of the Board, the President or twenty percent (20%) of the Directors upon two (2) days’ prior written notice to each Director of the date, time and place of the meeting, which notice may describe the purpose of the meeting. Special meetings may be held at any time without notice if all the Directors are present and none of them (at the beginning of the meeting or promptly upon his/her arrival) objects to holding the meeting or transacting business at the meeting, or if all the Directors waive notice in writing either before or after the meeting. Meetings may be conducted in person, by telephone conference calls, or by other means in which all persons participating can hear one another.

SECTION 3 – Quorum. A majority of the Board of Directors shall constitute a quorum for the purpose of transacting business.

SECTION 4 – Majority Vote. If a quorum if present when a vote is taken, the affirmative vote of the majority of the votes cast shall determine any question unless otherwise specifically provided in these Bylaws. In the event of a tie vote, the Chair of the Board will decide the question.

SECTION 5 – Attendance. Attendance by individual Directors on the Board of Directors is necessary to ensure representation of the Active Membership of the Association. If an individual Director is absent from two (2) consecutive Regular Meetings of the Board of Directors beginning with the Board meeting following the election of the Board of Directors during the Annual Meeting of the Membership, the remaining Directors may remove the Director.

SECTION 6 – Action Without a Meeting. Unless otherwise restricted by these Bylaws, any action required or permitted to be taken at a meeting of the Board of Directors may be taken without a meeting if a consent in writing setting forth the action so taken shall be signed by each Director entitled to vote with respect to the subject matter thereof, either before or after such action.

SECTION 7 – Interested Director Recusal. A Director shall recuse himself/herself from any vote of the Board of Directors on a matter in which such Director is "interested” in accordance with the conflict of interest rule adopted by the Board of Directors.

SECTION 3 – Term. The term of elected officers shall start with their election by the Board of Directors. An elected officer shall hold office for a one (1) year and until the term of his/her successor begins.

SECTION 5 – Vice Chair of the Board. The Vice Chair of the Board will coordinate and chair the activities of the Long Range Planning Committee to manage the Association’s strategic planning and report to the Board of Directors as appropriate, and shall have such powers and duties as may from time to time be assigned to him/her by the Chair of the Board or the Board of Directors. In the absence or disability of the Chair of the Board, the Vice Chair shall preside at all meetings of the Board of Directors and of the membership. Except as otherwise provided in these Bylaws or in the resolutions establishing Committees, he/she shall be an ex-officio member of all Committees of the Board of Directors.

SECTION 7 – Treasurer. The Treasurer shall be responsible for the financial affairs of the Association. The Treasurer will coordinate and chair the activities of the Finance Committee, which shall report to the Board of Directors as appropriate, and shall serve as Association Treasurer. The Treasurer shall have charge of and be responsible for all funds, securities, receipts and disbursements of the Association, and shall oversee the deposit of all monies, securities and other valuable effects in the name and to the credit of the Association in such banks and depositories as shall be designated by the Board of Directors. He/she shall render to the Chair of the Board, the Board of Directors and the President an account of all his/her transactions as Treasurer and of the financial condition of the Association and shall exhibit his/her books, records and accounts to the Chair of the Board, the Board of Directors or the President at any time. He/she shall:

D. Disburse the funds of the Association as ordered by the Board of Directors, taking proper vouchers for such dis-bursement; and

E. Perform all duties incident to the office of Treasurer and such other duties as may from time to time be assigned to him/her by the Board of Directors or the Chair of the Board.

SECTION 9 – Vice Chair for Membership and External Affairs. The Vice Chair for Membership and External Affairs shall have charge of and be responsible for the external affairs and outreach for the Association, and shall:

Prepare and conduct outreach plans to provide information about the 504 loan program to all necessary organizations and other entities;

Publish the Association newsletter and maintain the

Association web site;

Market the 504 loan program;

Market the Association to prospective members; and

Report to the Board of Directors as appropriate.

B. Chair the External Affairs Committee, which shall:

Prepare and conduct outreach plans to provide information about the 504 loan program to all necessary organizations and other entities;

Publish the Association newsletter and maintain the

Association web site;

Market the 504 loan program;

Market the Association to prospective members; and

Report to the Board of Directors as appropriate.

C. Perform all duties incident to the office of Vice Chair for Membership and External Affairs and such other duties as may from time to time be assigned to him/her by the Board of Directors or the Chair of the Board.

SECTION 11 – Vice Chair for Legislative Affairs. The Vice Chair for Legislative Affairs will coordinate and chair the activities of the Legislative Affairs Committee, which shall report to the Board of Directors as appropriate, and shall:

A. Maintain liaison with the congressional committees that legislate the 504 loan program;

B. Monitor all legislative activity regarding the 504 loan program;

C. Provide, as necessary, comments, 504 industry input and recommendations on all legislative matters that are promulgated for the 504 loan program;

D. Develop and publish guidance to Association members on legislative matters that affect the 504 loan program; and

E. Perform all duties incident to the office of Vice Chair for Legislative Affairs and such other duties as may from time to time be assigned to him/her by the Board of Directors or the Chair of the Board.

SECTION 13 – Vacancies. In the event of a vacancy in the elective offices caused by the disability, resignation, termination of eligibility, removal or death of any officer other than the Chair of the Board, the Executive Committee shall designate a successor to perform the duties of that office to serve until the next meeting of the Board of Directors at which time the Board will fill the vacancy.

SECTION 15 - Resignation. In the event that a officer desires to resign, such officer shall submit his or her resignation, specifying whether such resignation is effective immediately or at a stated future date and time, in writing to the Chair of the Board or, in the event that the Chair desires to resign, to the Vice Chair of the Board, the President or the Secretary. The Chair of the Board or the Vice Chair of the Board or the President or Secretary receiving such resignation shall promptly send written notice of the resignation to the Board of Directors and, upon the sending of such notice, the resignation shall become irrevocable.

SECTION 2 – Eligibility. Any individual, other than the President, serving as a Director on the Board of Directors, who has completed at least a one (1) year term on the Board, shall be eligible for any office, except that of Chair of the Board. The Chair of the Board shall be a duly elected Director on the Board of Directors, and shall have served as an officer of this Association for at least one (1) year. The President is not eligible to be an elected officer.

SECTION 4 – Chair of the Board. The Chair of the Board shall be responsible for the management of the Association and shall be primarily responsible for overseeing the implementation of the policies, resolutions and orders of the Board of Directors, subject to the right of the Board of Directors to delegate specific powers to other officers of the Association. He/she shall preside at all meetings of the Board of Directors and of the membership. He/she shall have authority over the general management and direction of the property, business and operations of the Association, and over its several officers, subject only to the ultimate authority of the Board of Directors. Except as otherwise provided in these Bylaws or in the resolutions establishing Committees, he/she shall appoint and be an ex-officio member of all Committees of the Board of Directors. He/she may execute in the name of the Association deeds, mortgages, bonds, contracts, or other instruments except in cases where execution shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Association or shall be required by law otherwise to be executed. In the absence of the President, the Chair of the Board shall serve as the chief executive officer of the Association. In addition, he/she shall perform all duties incident to the office of Chair of the Board and such other duties as may from time to time be delegated to him/her by the Board of Directors.

SECTION 6 – Secretary. The Secretary will coordinate and chair the activities of the Administration Committee, which shall report to the Board of Directors as appropriate, and shall serve as Association Secretary. The Secretary shall act as secretary of all meetings of the Board of Directors and of the membership. When requested, he/she also shall act as secretary of the meetings of the Committees of the Board of Directors. The minutes of all meetings of the Board of Directors shall be recorded by the Secretary or by a person who shall be designated by the Board of Directors or the Chair of the Board. The Secretary shall keep and preserve the record of all votes and the minutes of all such meetings in permanent books. He/she shall give or cause to be given notice of all meetings of the Board of Directors, and he/she shall see that all other notices required to be given by the Association are duly given. He/she shall have custody of all deeds, leases, contracts, and other important corporate documents, shall have charge of the books, records and papers of the Association relating to its organization and management as a corporation, shall see that all reports, statements, and other documents required by law (except tax returns) are properly filed, and shall in general perform all the duties incident to the office of Secretary and such other duties as may from time to time be assigned to him/her by the Board of Directors or the Chair of the Board.

SECTION 8 – Vice Chair for Education. The Vice Chair for Education shall have charge of and be responsible for the education and training programs of the Association, and shall:A. Chair the Education and Training Committee, which shall:

Plan, schedule, and conduct the Association’s training and education programs;

Develop new education and training courses;

Improve education and training services;

Maintain adequate training and student records;

Prepare appropriate education and training budgets; and

Report to the Board of Directors as appropriate.

B. Perform all duties incident to the office of Vice Chair for Education and such other duties as may from time to time be assigned to him/her by the Board of Directors or the Chair of the Board.

SECTION 10 – Vice Chair for Regulatory Affairs. The Vice Chair for Regulatory Affairs will coordinate and chair the activities of the Regulatory Affairs Committee, which shall report to the Board of Directors as appropriate, and shall:

A. Maintain liaison with the government agencies that regulate the 504 loan program;B. Monitor all regulatory activity regarding the 504 loan program;C. Provide, as necessary, comments, 504 industry input and recommendations on all regulations, standard operating procedures (SOPs) and notices that are promulgated for the 504 loan program;D. Develop and publish guidance to Association members on regulatory matters, SOPs and notices for the 504 loan program; andE. Perform all duties incident to the office of Vice Chair for Regulatory Affairs and such other duties as may from time to time be assigned to him/her by the Board of Directors or the Chair of the Board.

SECTION 12 – Succession of Office. In the event of the absence, disability, resignation, termination of eligibility, removal or death of the Chair of the Board, the Vice Chair of the Board, the Secretary and the Treasurer, in that order, shall represent the Association and act as authorized by the Board of Directors.

SECTION 14 – Removal or Suspension. The Board of Directors may remove, and the Chair of the Board or Executive Committee may summarily, suspend any officer of the Association who exceeds the scope of his/her authority as delegated by the Board of Directors or who publicly advocates or supports, as an Officer of the Association, matters not approved by the Board of Directors or Membership, or for cause.

SECTION 16 – Powers and Duties. Except as otherwise provided in these Bylaws, officers of the Association shall have such authority and shall perform such duties as may be determined by resolution of the Board of Directors. In carrying out his/her responsibilities, an elected officer may delegate any of his/her duties to the President or any other person, subject to the ultimate responsibility, oversight and direction of such elected officer.

ARTICLE VIII

ElectionsSECTION 1 – Election Procedures. The Board of Directors is responsible for adopting procedures for the conduct of elections of Directors. The procedures shall be reviewed at each Fall meeting of the Board of Directors, amended as appropriate, and approved. The procedures, as approved, will be posted on the membership section of the Association’s website and will apply to the next election of Directors.

SECTION 3 – Nomination and Election of At-Large Directors.

A. The Election Committee shall canvass the Membership,shall solicit and consider recommendations, and shall nominate all candidates who are recommended by the membership to serve as At-Large Directors on the Board of Directors of the Association, who are eligible in accordance with Article III of these Bylaws. In the event that there are fewer eligible candidates than the number of At-Large Director positions to be filled, the Election Committee shall select at least one nominee for each At-Large Director position to be filled for election by the Active Members-in-Good-Standing during the Annual Meeting of the Membership. Active Members-in-Good-Standing may make additional nominations from the floor subject to the eligibility requirements forDirectors in Article III of these Bylaws.

B. Ballots shall be prepared by the Election Committeewith approval by the Secretary. These ballots shall be distributed to all Active Members-in-Good-Standing to enable those who do not attend the Annual Meeting of the Membership to vote. All ballots returned to the Association prior to the Annual Meeting will be opened and counted during the election by the Election Committee. An attendee acting as an authorized representative of his/her CDC and present at the Annual Meeting of the Membership must vote in person for his/her CDC and, in that case the CDC’s vote on the ballot, if any, returned to the Association will not be counted.

C. Votes from the Active Members-in-Good-Standing present and voting, plus votes from the valid ballots returned to the Association from Active Members-in-Good-Standing not present, shall be used to elect the At-Large Directors. The At-large Director candidates with the largest vote totals will be elected for the open At- Large Director positions. The members of the Election Committee shall tabulate the results to be announced during the Annual Meeting.

SECTION 5 – Nomination and Election of Officers.

A. Officers shall be elected at the meeting of the Board of Directors that takes place immediately following the Annual Meeting of the Membership.

B. Whenever only one nomination for an elective office is presented to the Board of Directors, election shall be by voice vote. If there is an even number of Directors voting by secret ballot, then the officer who would be r sponsible for breaking any tie will not vote. Whenever more than one nomination is presented, vote shall be by secret ballot. If more than one candidate is nominated for an office, an affirmative vote of the majority of the Directors voting shall be necessary to elect. If no candidate receives a majority, a second vote shall be taken for the two leading candidates. If there is still a tie after the second vote, the Chair of the Board will break the dead- lock; provided, however, that if the tie is with respect to electing the Chair of the Board, then the existing Chair of the Board, the Vice Chair of the Board, the Secretary or the Treasurer, in that order, who is not a candidate for Chair of the Board, will break the deadlock.

SECTION 2 – Election Committee. There shall be an Election Committee composed of seven (7) Active Members-in-Good-Standing appointed by the Secretary. The members of the Election Committee shall consist of two (2) members of the Board of Directors not standing for election and five (5) employees of non-Board Active Members-in-Good-Standing of the Association from Federal Regions not scheduled for election at the Annual Meeting of the Membership. Appointments to the Election Committee shall be made and notice given to the Membership of the members of the Election Committee at least three (3) months prior to the Annual Meeting of the Membership. The Secretary shall designate the Chair of the Committee. The Committee will resolve questions relating to the eligibility of candidates, will resolve any questions which relate to the interpretation or application of the procedures for the conduct of elections, and, upon direction of the Secretary, perform other appropriate duties. In making its nomination of candidates, or while accepting nominations from the floor, the Election Committee shall ensure that only one representative from an Active Member-in-Good-Standing serves on the Board of Directors. If the Secretary is or intends to be a candidate in the election, then the Secretary shall recuse himself or herself from participating in any Election Committee meetings or actions, and any duties of the Secretary regarding elections shall be assigned by the Chair of the Board to another member of the Executive Committee, who is not and does not intend to be a candidate in the election.

SECTION 4 – Nomination and Election of Regional Directors.

A. The Election Committee shall canvass the Membership, shall solicit and consider recommendations, and shall nominate all candidates to serve as Regional Directors on the Board of Directors of the Association, who are eligible in accordance with Article III of these Bylaws. In the event that there are fewer eligible candidates than the number of Regional Director positions to be filled, the Election Committee shall select at least one nominee for each Regional Director position to be filled for election by the Active Members-in-Good-Standing of the respective Federal Region during the Annual Meeting of the Membership. Active Members-in-Good-Standing from their respective Federal Region may make additional nominations from the floor subject to the eligibility requirements for Directors in Article III of these Bylaws.

B. The Secretary shall identify a time at the Annual Meeting for the purpose of the Membership to convene caucuses by Federal Region. A location for each Federal Region caucus shall be identified within the host Annual Meeting facility. The time of each regional caucus shall be included in the Annual Meeting Notice, and the location of each regional caucus shall be posted at the Annual Meeting.

C. Within each Federal Region caucus holding an election for the Board of Directors, a member of the Election Committee will preside.

D. Ballots shall be prepared by the Election Committee with approval by the Secretary. These ballots shall be distributed to all Active Members-in-Good-Standing in the respective Federal Region to enable those who do not attend the Annual Meeting of the Membership to vote. All ballots returned to the Association prior to the Annual Meeting will be opened and counted during the election by the Election Committee. An attendee acting as an authorized representative of his/her CDC and present at the Federal Region caucus during the Annual Meeting of the Membership must vote in person for his/her CDC and, in that case the CDC’s vote on the ballot, if any, returned to the Association will not be counted.

E. Votes from the Active Members-in-Good-Standing from their respective Federal Region present and voting, plus votes from the valid ballots returned to the Association from Active Members-in-Good-Standing from their respective Federal Region not present, shall be used to elect the Regional Directors. The Regional Director candidate with the majority vote total in his/her region will be elected. If no candidate receives a majority vote, a second vote of those Active Members-in-Good- Standing for the respective Federal Region present will be taken for the two leading candidates. If there is still a tie after a second vote, a ballot box will be set-up. The deadline for that particular Federal Region’s Active Members-in-Good-Standing present to vote is extended until 2:00 p.m. of the next day. This will allow the candidates to campaign within their constituency. If there is still a tie after the third vote, the Election Committee will poll the Active Members-in-Good-Standing for this particular Federal Region, who are present and those who are not present at the Annual Meeting. Telephone communications will be used to poll the Active Members-in-Good-Standing who are not present. The Election Committee shall tabulate the votes of those present and those not present. If there is still a tie after the fourth vote, the Board of Directors will meet to break the dead-lock. The member of the Election Committee for this particular Federal Region caucus shall tabulate the results to be announced during the Annual Meeting.

SECTION 6 – Eligibility to Vote to Elect Directors. Only representatives of Active Members-in-Good-Standing of the Association are eligible to vote to elect Directors. Those CDCs whose dues are paid in full prior to the Annual Meeting of the Membership, or who are current on a formal quarterly dues payment plan, are Active Members-in-Good- Standing. The Election Committee shall verify that all votes cast in elections are eligible. However, no CDC shall be deprived of its eligibility to vote unless it receives written notice from the Association that it is not in good standing at least thirty (30) days prior to the election. Additionally, any member may appeal this finding or correct the deficiency prior to the start of the Annual Meeting of the Membership and thus retain its voting rights.

ARTICLE IX

Administrative Officers and StaffSECTION 1 – President. The chief executive officer of the Association is the President, who shall be employed at will by the Association and shall serve until such time as he or she resigns, dies or is removed from office by the vote of a majority of the entire Board of Directors. The Executive Committee shall have the authority to determine all other terms and conditions of employment of the President, including compensation and other financial arrangements.

A. The President shall represent the Association and act as authorized by the Board of Directors and/or the Executive Committee. The President shall report to the Chair of the Board, the Board of Directors and/or the Executive Committee and have such management responsibilities and authority as the Chair of the Board, the Board of Directors and/or the Executive Committee may designate. He/she shall have general and active supervision over the property, business, and affairs of the Association. He/she shall supervise and direct the staff of the Association. He/she may execute in the name of the Association deeds, mortgages, bonds, contracts, or other instruments except in cases where the execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Association or shall be required by law otherwise to be executed. In addition, he/she shall perform all duties incident to the office of President and such other duties as may from time to time be assigned to him/her by the Board of Directors, the Executive Committee and/or the Chair of the Board.

B. The President shall be a voting member of the Board of Directors and the Executive Committee and shall be an ex-officio member of all committees.

SECTION 2 – Staff. The President may employ, and discharge, the staff for the Association, at ranges of compensation approved by the Executive Committee, and within the limits of the annual budget. Members of the staff shall carry on the business of the Association as instructed and supervised by the President.

ARTICLE X

Advisory Committees

SECTION 1 – Advisory Committees. There shall be advisory committees of the Association as follows:

A. Standing Advisory Committees. There shall be Standing Committees with Chairs as follows:

Standing Committee | Chair

Administration | Secretary

Annual Meeting Planning | Secretary

Education and Training | Vice Chair for Education

Membership | Vice Chair for Membership and External Affairs

External Affairs | Vice Chair for Membership and External Affairs

Regulatory Affairs | Vice Chair for Regulatory Affairs

Legislative Affairs | Vice Chair for Legislative Affairs

FinanceTreasurerAudit | *Appointed by Chair of the Board

Political Action (PAC) | *Appointed by Chair of the Board

Long Range Planning | Vice Chair of the Board

Other Standing Committees and Chairs for those other Standing Committees may be established and approved from time to time by the Board of Directors.

B. Special Advisory Committees. Special Committees may be established from time to time by the Board of Directors. Chairs of Special Committees will be appointed by the Chair of the Board. The Chair of a Special Committee can be either a Director or an individual serving as an employee of an Active Member-in-Good-Standing of the Association.

C. Council of Past Chairs of the Board. There shall be designated a Council of Past Chairs of the Board. This Council shall consist of former Chairs of the Board of the Association who are still active in 504 Certified Development Companies that are Active Members-in-Good-Standing of the Association. The Members of the Council shall be ex-officio, nonvoting members of the Board of Directors.

SECTION 3 – Term.

A. Until at least a majority of the members of a Standing Committee is approved each year after the Annual Meeting of the Membership by the Executive Committee, the previous members of that Standing Committee, despite one or more former Directors being members or there being vacancies in members, will continue to operate as the Standing Committee.

B. The term of Special Committees will be determined by resolution of the Board of Directors.

SECTION 5 – Quorum. A quorum of each Committee shall consist of a majority of the membership of that Committee.

SECTION 7 – Majority Vote. If a quorum is present when a vote is taken, the affirmative vote of the majority of the votes cast by the Committee members shall determine any question unless otherwise specifically provided in these Bylaws. In the event there is a tie vote, the Committee Chair will decide the question.

SECTION 9 – Powers and Duties. Except as otherwise provided in these Bylaws, Committees shall have such authority and shall perform such duties as may be determined by resolution of the Board of Directors; provided that no advisory committee shall exercise any of the powers of the Board of Directors.

SECTION 2 – Membership.

A. Each Standing Committee or Special Committee shall have an odd number of members and a minimum of at least five (5) members. Each Standing or Special Committee must have at least two (2) Directors as members, including the Chair of that particular Committee. Other Committee members must be individuals serving as employees of Active Members-in-Good-Standing of the Association and may include other Directors.

B. Within thirty (30) days after the Annual Meeting of the Membership, the Chair assigned to a particular Standing Committee will nominate candidates from among the Directors and other Active Members-in-Good-Standing of the Association to serve as members of that Standing Committee for the next year and the Committee Chair will send the list of nominees to the Executive Committee. The Executive Committee will approve or reject the nominees within fourteen (14) days thereafter. If a nominee is rejected or whenever a vacancy occurs during the year in the membership of a Standing Committee, the Chair assigned to that particular Standing Committee will fill the open seat and notify the Executive Committee. The Chair of the Board appoints the Chairs of Special Committees. Once appointed, the Chair assigned to a particular Special Committee will nominate candidates from among the Directors or other Active Members-in-Good-Standing of the Association to serve as members of that Special Committee and the Special Committee Chair will send the list of nominees to the Executive Committee. The Executive Committee will approve or reject those nominees within seven (7) days after receipt of the nominations. If a nominee is rejected or whenever a vacancy occurs in the membership of a Special Committee, the Chair assigned to that particular Special Committee will fill the open seat and notify the Executive Committee.

A member of the staff for the Association will be assigned as a liaison to each Standing Committee or Special Committee.

SECTION 4 – Meetings. Meetings of a Committee may be called by the Chair of the Board, the President, the Committee Chair, or any three (3) of the Committee’s members upon two (2) days’ prior written notice to each member stating the time and place and purpose of the meeting. Meetings may be held at any time without notice if all the members of a Committee are present and none of them (at the beginning of the meeting or promptly upon his/her arrival) objects to holding the meeting or transacting business at the meeting, or if all the members of the Committee waive notice in writing either before or after the meeting. Meetings may be conducted in person, by telephone conference calls, or by other electronic means in which all persons participating can hear one another.

SECTION 6 – Reports. Committee reports shall be made regularly by the Committee Chair to the Board of Directors.

SECTION 8 – Action Without a Meeting. Unless otherwise restricted by these Bylaws, any action required or permitted to be taken at a meeting of a Committee, may be taken without a meeting, if a consent in writing setting forth the action so taken shall be signed by each Committee member entitled to vote with respect to the subject matter thereof, either before or after such action.

ARTICLE XI

FinanceSECTION 1 – General Funds. Dues and other monies collected by the Association shall be placed in a depository approved by the Board of Directors and shall be disbursed in such manner as the Board of Directors may direct.

SECTION 2 – Authority to Sign Checks. The following officers of the Association shall have authority to sign checks for and on behalf of the Association: The Chair of the Board, the President, and the Treasurer may sign checks up to and including an amount of $20,000.00. All checks above $20,000.00 shall be signed by two of the authorized signers.

SECTION 3 – Bonding Requirement. The Chair of the Board, the President, and the Treasurer and other officers or members of the staff authorized by the Board of Directors to handle the funds of this Association shall furnish a bond at the expense of the Association in such amount as the Board of Directors shall determine.

SECTION 4 – Approved Budget. The Board of Directors shall adopt a budget for each fiscal year. The Association shall function within the totals of such budget. Any motion or resolution requiring the expenditure of funds in excess of this approved budget, whether contained in a Committee Report or initiated from the floor, shall be referred to the Finance and Executive Committees for report before action by the Board of Directors.

ARTICLE XII

IndemnificationSECTION 1. The Association may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative (other than an action by or in the right of the Association) by reason of the fact that he/she is or was a director, officer, employee, or agent of the Association or is or was serving at the request of the Association as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust or other enterprise, against liability and reasonable expenses including attorneys' fees, judgments, fines and amounts paid in settlement actually incurred by him/her in connection with such action, suit or proceeding if he/she acted in good faith and in a manner he/she reasonably believed to be in or not opposed to the best interests of the Association, and with respect to any criminal action or proceeding, had no reasonable cause to believe his/her conduct was unlawful, and with respect to an employee benefit plan, reasonably believed his or her conduct was in the interests of the participants in and beneficiaries of the plan. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did or did not act in good faith and in a manner which he/she reasonably believed to be in or not opposed to the best interests of the Association, and, with respect to any criminal action or proceeding, had or did not have reasonable cause to believe that this conduct was unlawful.

SECTION 3. To the extent that a director, officer, employee, or agent of the Association has been successful on the merits or otherwise in defense of any action, suit, or proceeding referred to in Sections 1 and 2 hereof, or in defense of any claim, issue, or matter therein, he/she shall be indemnified against reasonable expenses (including attorneys' fees) actually incurred by him/her in connection therewith.

SECTION 5. Expenses incurred in defending a civil or criminal action, suit, or proceeding may be paid by the Association in advance of the final disposition of such action, suit, or proceeding as authorized by the Board of Directors in the specific case upon receipt of a written affirmation by the director, officer, employee, or agent of his or her good faith belief that he or she met the relevant standard of conduct and an undertaking by or on behalf of the director, officer, employee, or agent to repay such amount unless it shall ultimately be determined that he/she is entitled to be indemnified by the Association as authorized in this Article XII.

SECTION 7. The Association shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the Association as a director, officer, employee, or agent of either the Association or, at the request of the Association, of another association, partnership, joint venture, trust, or other enterprise against liability asserted against him/her and incurred by him/her in any such capacity, or arising out of his/her status as such, whether or not the Association would have the pow- er to indemnify him/her against such liability under the pro- visions of this section.

SECTION 2. The Association may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action or suit by or in the right of the Association to procure a judgment in its favor by reason of the fact that he/she is or was a director, officer, employee, or agent of the Association, or is or was serving at the request of the Association as a director, officer, employee, or agent of another association, partnership, joint venture, trust, or other enterprise against reasonable expenses (including attorneys’ fees) actually incurred by him/her in connection with the defense or settlement of such action or suit if he/she acted in good faith and in a manner he/she reasonably believed to be in or not opposed to the best interests of the Association, and with respect to any criminal action or proceeding, had no reasonable cause to believe his/her conduct was unlawful, and with respect to an employee benefit plan, reasonably believed his or her conduct was in the interests of the participants in and beneficiaries of the plan, and except further that no indemnification shall be made in respect of any claim, issue, or matter as to which such person shall have been adjudged to be liable for misconduct in the performance of his/her duty to the Association unless and only to the extent that the tribunal in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the tribunal shall deem proper.

SECTION 4. Any indemnification under Sections 1 and 2 hereof (unless ordered by a court or other tribunal) shall be made by the Association only as authorized in the specific case upon a determination that indemnification of the director, officer, employee, or agent is proper in the circumstances because he/she has met the applicable standard of conduct set forth in said Sections 1 and 2. Such determination shall be made:

A. By the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit, or proceeding; or

B. If such a quorum is not obtainable, or even if obtainable, a quorum of disinterested directors so directs, by special legal counsel in a written opinion; or

C. By the Membership.

SECTION 6. The indemnification provided by this Article XII shall be subject to the indemnification provisions of the District of Columbia Nonprofit Corporation Act in effect at the time that the action or suit giving rise to possible indemnification is filed. The indemnification provided by this Article XII shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any bylaw, agreement, vote of members, or disinterested directors, or otherwise, both as to action in his/her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.

ARTICLE XIII

Amendments

SECTION 1. Any Active Member-in-Good Standing of the Association may submit a proposed Bylaw or proposed amendment to a Bylaw to the Administration Committee for consideration by the Membership. Bylaws may be adopted or amended by the affirmative vote of the majority of Active Members-in-Good-Standing present and voting in person at the Annual Meeting of the Membership or at any Special Meeting of the Membership, provided that:

A. Any proposed Bylaw or proposed amendment to a Bylaw shall first be referred to the Administration Committee at least forty-five (45) days prior to the Annual Meeting or any Special Meeting of the Membership at which it will be presented to the Membership; and

B. The Administration Committee shall, either as part of the notice of the Membership meeting or by separate notice given to each member in writing at least thirty (30) days in advance of the Membership meeting, report to the Membership about such proposed Bylaw or proposed amendment to a Bylaw. The report of the Administration Committee shall include the proposed Bylaw or proposed amendment to a Bylaw and whether the Administration Committee recommends approving or rejecting such proposed Bylaw or proposed amendment to a Bylaw.

SECTION 2. Any Director on the Board of Directors or any Active Member-in-Good Standing of the Association may submit a proposed Bylaw or proposed amendment to a Bylaw to the Administration Committee for consideration by the Board of Directors. Bylaws may be adopted or amended by a two-thirds (2/3) vote of the Directors on the Board of Directors at any meeting of the Board of Directors, provided that:

A. Any proposed Bylaw or amendment to a Bylaw shall first be submitted to the Administration Committee at least thirty (30) days prior to that meeting of the Board of Directors at which it will be presented to the Board of Directors; and

B. The Administration Committee shall submit a written report to the Board of Directors at least ten (10) days prior to the meeting of the Board of Directors, which report shall include the proposed Bylaw or proposed amendment to a Bylaw and whether the Administration Committee recommends approving or rejecting such proposed Bylaw or proposed amendment to a Bylaw.